Analytics and Witch Doctoring: A Cure for the Black Box

Mentality

February 1, 2011

O’Reilly Strata Conference

J.C. Herz, Batchtags LLC

jc@tripledex.com

Analytics: An Intervention

• Original Sin

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Enterprise Pathologies Critical Questions

Analytics: Occult Phenomenon

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Very powerful

Don’t understand it

Practitioners possess arcane knowledge

Alchemy

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SecretAlgorithms

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Greek Letters Are Your Kryptonite

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High Status Helplessness

• If you understood the technology, you’d be one of those people whose job it is to make technology work.

• You know, underlings

Executive ADD - Kaching!

• Re-starts are where consulting shops make their money

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Mid-Life Crisis

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Shiny Pebble Syndrome

• Infoviz Porn: Visualization with no use case– Ex: Social Network visualization. Why?– START with a use case and work

forward

• Demo Envy: just because it looks slick doesn’t mean it’s possible, or even advisable, to pipe your data into it.

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A Ballad of Spectacular Information Display

• Time Magazine 1976• Telex text routing:

information off the wire goes to terminals, properly foldered

• Z8 terminal display awes executives

• Pneumatic system not eliminated

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Technical Reality vs. Leadership Attention Span

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Half Ass Syndrome

• Halfway into the project, jump off into the next problem.

• Haven’t refined results or hypothesis

• Failure blamed on technology, but it’s really loss of interest and desire for instant gratification

Shelfware Syndrome

• The guy who was driving the program left...

• Approach-Avoidance conflict --> pilot-itis

• A US agency has $30M of software that hasn’t been installed…some of it with maintenance contracts.

• Base Model vs. Fully Loaded– One enterprise bought $12M worth of

Autonomy before figuring out that the add-ons they needed would be another $22M.

Customization Before Testing

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Critical Question: What is the Validation Test?

• Formulating the validation test keeps both the customer and the developer focused - and honest

• Suggest pay for performance, and see if the developer or vendor freaks out.

• Make sure validation is ongoing - in case the ground is shifting

Data Due Diligence & Auditing

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Shame

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Shame

Ugly Babies

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Critical Question: Data Quality

• How complete is it?

– Ex: 600 custom fields, only two have more than 50% coverage

• How accurate is it? How do you know?

• How consistent is it?

– Good test: make three calls to different parts of the company, to get an answer to a factual question that doesn’t require calculation.

Critical Question: Half-Life of Data

• How long is the data accurate?

• How long is the data useful?

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Critical Question: Real World Context

• Without real world data, “behavioral” metrics are misleading

• Where is the transactional data that validates insights from non-transactional data?

• How would you prove the magic analytics WRONG?

• Are you prepared to spend painful amounts of money cleaning up your data?

• Crack heads if people don’t share data?

• Make business units accountable for their data?

• Play hardball to make sure data is not stored in single-application proprietary formats?

Data: Gut Check

Critical Questions: Workflow

• What workflow changes will this proposed capability require?

• People hate changing their workflow, even if it’s an improvement

• Never attribute to stupidity what can be attributed to laziness

• What is your plan for changing workflow? How do you enforce it?

The perfect application that no-one uses is still worthless

Process

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Politics

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What are you prepared to do?

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Critical Question: Consequences

• What actions are you willing to take on the basis of validated analytic insight?– Change your product?– Change your marketing budget?– Change people’s job descriptions?– Re-allocate R&D budgets?

• What actions are you not willing to take?

Stakes

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Critical Question: Tempo

• How fast will a decision be made on the basis of analytic insight?

• Quarterly?

• Daily?

• Within seconds?

• Milliseconds?

• Never?

• Realtime vs. Continuous vs. Batch

Precision vs. Accuracy

When precision exceeds accuracy, you’re setting yourself up for analytic failure

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OODA Loop

Which of these does an analytic tool/technology do?

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Before You Rip ‘n’ Replace:

What is the exit cost of this technology?

Does “turnkey” mean monoculture?

Business Payoff vs. Intellectual Appeal

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Social Network Analysis

Operations Research

Market Segmentation

Competitive Intelligence

Pilots to test new analyst tools with tiny amounts of generic data

360º Lead Scoring

Validate Marketing Effectiveness

Questions?

• J.C. Herz jc@tripledex.com (202) 213-3151

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Base Model vs. Fully Loaded

“Never attribute to stupidity what can be explained by

laziness.”

Ugly Babies & Pretty Babies

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